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Crypto influencer and analyst Tyler Swope says a number of automated market makers (AMMs) will take off in the DeFi space in 2021.
AMM’s are essentially smart contracts that make it easy for investors to trade cryptocurrencies without the need for complex order books. It’s the technology that powers several popular decentralized exchanges that have emerged this year, led by Uniswap.
Swope says he’s tracking two DeFi platforms that have flourished in the last 30 days despite Bitcoin’s retracement. He believes Black Hole Swap is quietly gaining steam and will revolutionize the AMM space.
“So what does Black Hole do? It’s the first AMM that can process transactions exceeding pool liquidity… How the heck does it do that?
Well the protocol taps in excess supplies on lending platforms like Compound, Aave and others.”
Black Hole is a product of Hakka Finance, a decentralized finance ecosystem. Hakka Finance’s token, HAKKA, is trading at $0.078355 at time of writing and is up 81.4% in the past month, according to CoinGecko.
Swope also names Perpetual Protocol, which enables AMM-powered perpetual futures contracts, as a project to watch in the months ahead.
The protocol’s native token, PERP, is trading at $1.40 at time of writing and is up 54.3% in the past 30 days, according to CoinGecko.
Swope also says Balancer (BAL) is one of his top picks, which unlike Uniswap can have more than two tokens in a liquidity pool. BAL, Balancer’s governance token, launched in June and is trading at $11.21 at time of writing, according to CoinGecko.
Swope notes that Balancer is forming numerous influential partnerships across the DeFi space, including teaming up with the decentralized autonomous organization PieDAO for its liquidity pools.
Swope says anyone investing in the risky DeFi space should look for projects with solid roadmaps, unique use cases and support within the industry.
“I look for DeFi collaborations. I look for fundamentals. What’s providing something new and exciting? Because eventually they will shine while the copycats go to the wayside.”
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